Partner Nelson Cheng’s Thoughts on Philanthropy

Before becoming a Partner in Los Angeles, Nelson Cheng was part of SV2 in Silicon Valley, one of the 27 Social Venture Partners member organizations in the United States, Canada, India, and Japan.

In recent years, one of my former colleagues at Google has become more involved with philanthropy — she and her boyfriend have done well financially and have wanted to become more active and engaged with nonprofits that they’re passionate about (she typically focuses on animals + the environment). She came to re-connect with me because she was reading “Philanthrocapitalism” and an organization that is featured in it, SV2 — I’m connected to. When I lived in Silicon Valley, I used to be a partner and on their board for a period of time — they did a little marketing piece on me because, at the time, I was one of the few younger partners and that’s how she ended up making the connection. There were many great benefits to SV2 but the two biggest for me was the ability to see many great nonprofits quickly (SV2 essentially acted as a high quality filtering mechanism) and connecting with many like-minded individuals who wanted to give back on a financial and potentially strategic level.

I started off doing stuff with nonprofits in high school. I used to volunteer at the local chapter of the American Cancer Society — they weren’t particularly computer savvy and so I would go in for a few hours every so often and do some very light database work. I really didn’t have any connection to ACS but I did like the idea of doing something “good”. I will say that I felt totally disconnected to the cause or even a sense that I was doing anything good — I think it’s hard to feel that way when you’re just going into an office, sitting at a computer, and then emerging a few hours later — especially when you’re 16 or so.

In college, I probably did nothing nonprofit-wise — which is weird because that’s likely one of the best times to do things. You’re just surrounded by potentially a lot of like-minded and socially active individuals. I was probably too focused on my grades and my future business career prospects (or at least worrying about them) and didn’t take advantage of a great opportunity.

However, when I was at amazon.com, a new thought occurred to me: “Nonprofits are run by passionate individuals who may or may not have business experience. Couldn’t I, as someone who has some business experience, bring that to a nonprofit and help them?” So I set about doing that — first by volunteering with a firm that basically provided free consulting help to nonprofits. It was me + an ex-Boeing exec helping a nonprofit founder / ED (Tanya) who was creating a nonprofit that did cancer therapy through knitting. We helped her write the business plan.

I also joined the board of a nonprofit in San Diego called StandUp for Kids which helps homeless children. I’ve long been drawn to causes that, for lack of a better term, give people a chance in life. Not everyone gets a chance along with the resources and opportunities — the thought of children being homeless was (and still is) mind-boggling to me. What future does a homeless child have and, of more immediate importance, how in the world can they get off the street and start building toward something?

Because I live in Los Angeles now, I’m involved with the equivalent organization, LASVP (Los Angeles Social Venture Partners), which, along with SV2, is part of the Social Venture Partners network. Their membership is comprised of individuals who have some financial capacity to support nonprofits while also wanting to engage on a more strategic level. The major difference with LASVP is they also put on an annual “Fast Pitch” competition to help nonprofit leaders think about how they market their organization. Non-profits get 2+ months of training / coaching on honing their elevator pitches which they eventually deliver in front of an audience. (I went last year and it was a spectacular event – George Lopez hosted and had special guests including Mayor Antonio Villaraigosa, Jamie Lee Curtis, and Michelle Branch. The Annenberg Foundation was one of the sponsors and the nonprofits got exposure to many potential funders.)

These experiences were broadly very instructive and still heavily define my perspective on nonprofits and philanthropy to this day. Over the years, because of various roles I’ve played, I’ve gotten to know maybe not dozens, but many nonprofits and their founders. With rare exception, they’re universally extremely passionate, driven people who want to do good.

So I guess the larger question here is, what to do if you’re a person with some means, maybe some ability + time, and some interest in doing “good” so to speak?

I like growth. I want to help great nonprofits go from small to big. I want them to have a giant footprint and help lots and lots of people. I suspect one path is in finding the right nonprofit — one that’s run by a founder / ED who believes in investment and infrastructure and growth. It’s really hard to diversify off of donations as the primary revenue stream — but one that has some cushion so the staff is not running after every donation just to keep the lights on. And frankly, probably one that has great marketing ability — orgs like Robin Hood and Tipping Point have proven this to be true.

The alternative, which is an idea that I’ve been toying with for a long time but haven’t figured out a model that I like or how exactly I’d like to fund it, is to found my own non-profit. The Social Venture Partners model is one part of the ecosystem — but I think there are more opportunities for impact when you’re running a massive fund (e.g. tens of mililions+ $).

Here’s the question I need to answer. How did great and large nonprofits of today get there? Was there some trigger beyond slow, massive growth over time? I want to figure out which ones went from helping 0 to 100,000 in 5 years and how’d they do it — and then figure out how to help more become like that.